Exit and Growth Strategies for Middle Market Businesses

While transaction volume has slowed a bit as the year has progressed, healthcare industry M&A is still a primary sector for M&A as big pharma looks to expand by acquiring small competitors with potential blockbuster drugs. In addition, big pharma companies are actively funding drug development companies with minority equity positions and the option for greater ownership should the drugs take off. Deals in the sector are also expected to be driven by healthcare IT innovation and hospital consolidation in the wake of the Affordable Care Act and declining reimbursements.

As patients are required to pay more and make more medical decisions, they likely will demand better information from providers. Despite being responsible for paying an increasing portion of their medical bills, most US consumers are not shopping around for the best deal. Fewer than 15% of Americans viewed comparative quality and pricing data for hospitals and physicians, and less than 10% actually used the data over a recent 12-month period, according to a survey by Kaiser Family Foundation. Reasons include lack of time to research competitors and difficulty find information and understanding technical terms. Consumers also struggled with inaccurate practitioner estimates and unexpected bills, according to Kaiser Health News. Some consumers with high deductibles end up forgoing care. Government health care officials are calling for greater pricing transparency to improve consumer access to comparative data.

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